Running positive clinical studies for drugs that could treat blockbuster indications is a good way to propel a stock's value higher. On Monday, shares of Acadia Pharmaceuticals
ACP-103 is being tested as an adjunct to existing schizophrenia compounds. By combining some currently marketed drugs with ACP-103, researchers hope to provide patients with more effective treatments, but fewer side effects.
In the phase 2 trial results announced this week, a combination of ACP-103 and Johnson & Johnson's
Companies developing drugs to treat chronic psychiatric disorders or their associated symptoms often skyrocket on any sort of positive clinical trial work. Considering that there are more than 2 million Americans diagnosed with schizophrenia in any given year, and drugs like Johnson & Johnson's Risperdal franchise achieved more than $4 billion in sales last year, it's no wonder that Acadia's market capitalization jumped $200 million yesterday on these positive results.
On the conference call yesterday, Acadia stated that the "optimal scenario" was to have a partner in place for the several-hundred-person phase 3 studies it will need to run with the drug. Testing drug candidates in controlled situations for indications like schizophrenia can be very tough, with high patient dropout rates and difficulty ensuring study compliance. Acadia will be smart to have a strong co-development partner in place before the pivotal phase 3 trials begin.
Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Johnson & Johnson is an Income Investor recommendation. The Fool has a disclosure policy.